1 
 
 
 
 
         DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS and APPEALS 
  
  
  
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 11-11793 
  ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Gina Marine, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HEINY, Claude R., Administrative Judge: 
 
Applicant contests the Department of Defense’s (DoD) intent to deny his eligibility 
for a security clearance to work in the defense industry. The debts following a vehicle 
repossession and home foreclosure plus nine charged-off or collection accounts alleged 
in the Statement of Reasons (SOR), total more than $30,000, have yet to be resolved. 
Clearance is denied.  
 
History of the Case 
 
 Acting under the relevant Executive Order and DoD Directive,1 on April 9, 2013, 
the DoD issued an SOR detailing security concerns. DoD adjudicators could not find 
that it is clearly consistent with the national interest to grant or continue Applicant’s 
security clearance. In an undated response, Applicant answered the SOR and 
requested a hearing. On September 14, 2013, I was assigned the case. On December 
5, 2013, the Defense Office of Hearings and Appeals (DOHA) issued a Notice of 
                                                          
1 Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as 
amended; DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program 
(January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the DoD 
on September 1, 2006. 
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Hearing for a teleconference hearing convened on December 18, 2013.2 Government’s 
Exhibits (Ex) 1 through 4 and 5 were admitted without objection. Applicant testified at 
the hearing. The record was held open to allow Applicant to submit additional 
information. Additional material (Ex. A- through H) was submitted and admitted into the 
record without objection. On December 27, 2013, DOHA received the hearing transcript 
(Tr.). 
 
Findings of Fact 
 
In Applicant’s Answer to the SOR, he denied he owed a deficiency balance (SOR 
1.i, $139,000) following the foreclosure of his home. He admitted the remaining 
charged-off or collection accounts, which totaled approximately $30,000. (Tr. 14) I 
incorporate Applicant’s admissions as facts. After a thorough review of the pleadings, 
exhibits, and testimony, I make the following additional findings of fact: 
 
 Applicant is a 61-year-old radar technician who has worked for a defense 
contractor since January 2008, and seeks to maintain a secret security clearance. (Tr. 
16, 17) He also worked for the same contractor from 2000 to 2005. (Tr. 16) Applicant 
called no witnesses other than himself, and produced no work or character references. 
Since January 2008, Applicant has worked in Afghanistan. He resides in company 
provided housing. (Ex. 2, Tr. 22) His annual salary the first three years he was overseas 
was approximately $140,000. (Tr. 23) His current monthly gross pay is $15,000 
($180,000 per year). His deductions are $8,000 and his monthly expenses are $2,421, 
which leaves a monthly remainder of $3,778. A portion of his $180,000 annual salary is 
exempt from federal income tax due to the foreign earned income exclusion.  
 
 From December 2005 through March 2006, Applicant commuted from Nebraska 
to his job in New Mexico. His annual pay was approximately $62,000. In August 2007, 
Applicant left the job by mutual agreement. He no longer wanted to work for the 
company. (Ex. 2) He does not recall if he was fired. He received severance pay as well 
as vacation pay from the company, totaling approximately $3,000. (Ex. 2, Tr. 19, 30) He 
was unemployed from August 2007 through January 2008.  
 
 Applicant began experiencing financial difficulties in the fall of 2006. From August 
2006 to February 2007, he was paying $1,500 to $2,000 monthly for his son’s medical 
expenses. (Ex. 2) No medical expenses were incurred for his son after February 2007. 
(Tr. 29) His son is currently 22 years old and his daughter is 24. (Tr. 59, 60) 
 
 In February 2006, Applicant purchased a home for $139,000. In the fall of 2006, 
six months after purchasing the home, he began experiencing financial problems and 
failed to make his $1,170 monthly mortgage payments for six or seven months, which 
resulted in $7,000 past-due. (Ex. 2, 3, Tr. 17) In February 2007, he was evicted from his 
home when the bank foreclosed upon the home. (Ex. 2, Tr. 18) He had no documents 
about the foreclosure and was unable to recall any details regarding the foreclosure. 
                                                          
2 The hearing date was selected to coincide with Applicant’s one-week visit to the United States from his 
overseas duty location.  Coordination of the time and date of the hearing with Applicant was conducted 
during November 2013. Notice was sent when a hearing location was established.  
3 
 
 
 
 
(Ex. 2) He does not know if the home was resold. (Tr. 19) The bank has not pursued 
any legal action regarding any deficiency resulting from the foreclosure. (Tr. 18)  
 
 In early 2006, Applicant had also purchased a $23,000 vehicle. In 2007, he 
began having trouble making his monthly payments. In early 2008, his vehicle was 
repossessed after he stopped making his $574 payments in September 2007. (Ex. 5) 
He made 17 monthly payments on the 60 month contract. (Ex. 4, 5, Tr. 21) He owed 
approximately $10,000 on the vehicle when it was repossessed. (Ex. 2) He asserts he 
has no additional obligation on this loan. He provided no documentation supporting his 
assertion. His December 2012 credit report lists a balance due of $9,068. 
 
 In December 2012, Applicant had approximately $9,000 in the bank and $97,000 
in stocks and bonds. (Ex. 2) From March 2009 through 2012, Applicant sent his son 
monthly amounts that averaged between $750 and $1,750. (Ex. A - F) He asserted, but 
failed to document, he sent his daughter a similar monthly sum over the same time 
period. He documented sending his daughter $1,500 in July 2012. (Ex. G)  
 
 Between July 2012 and January 2014, Applicant sent his sister, who is on 
disability, $10,500 and his niece, who is a single mother raising two children, $20,400. 
(Ex. G, H) He paid his ex-wife $32,070 and currently pays her $1,000 monthly until 
$95,000 in alimony is paid. (Ex. 2) He was divorced in November 2000. (Ex. 2)  
 
 In December 2012, Applicant was questioned about his delinquent debts. During 
a Personal Subject Interview (PSI), he indicated he was unaware of certain delinquent 
accounts appearing on his credit reports. He indicated he would pay a number of the 
delinquent accounts in January 2013. (Ex. 2) He has paid none of the debts.  
 
 In 2013, Applicant purchased a $155,000 home with a $30,000 down payment. 
(Ex. G, Tr. 38) He is current on his $804 monthly mortgage payments. (Tr. 39) He is 
also current on his utility bills, which are approximately $300 monthly. (Tr. 64) At the 
time of the hearing, his monthly net remainder (monthly income less monthly expenses 
and payment of debts) was $3,000 to $4,000 a month. (Tr. 40) He has approximately 
$300 in each of two savings accounts. (Tr. 41) He has not had a credit card since 2007. 
(Tr. 44)  
 
 A summary of Applicant’s delinquent accounts and their current status follows:    
 
 Creditor Amount  Current Status 
a Collection account for a 
telephone service. (Ex. 3, 
4, 5)  
$869 Unpaid. In his PSI, he stated he would 
pay this debt in early 2013. (Ex. 2) 
b Collection account for a 
TV satellite service. (Ex. 
3, 4, 5)  
$567 
 
Unpaid. In his PSI, he stated he would 
pay this debt in January 2013. (Ex. 2) 
c Collection action on a 
medical account. (Ex. 3, 
4, 5)  
$31 
 
Unpaid. In his PSI, he stated he would 
pay this debt in early 2013. (Ex. 2) 
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 Creditor Amount  Current Status 
d Charged-off account.  
High credit term was 
$8,963. (Ex. 3, 4) The 
balance was $6,991. 
Account opened 
November 2005.  
$8,963 Unpaid. In his PSI, he stated he would 
pay this debt in early 2013. (Ex. 2)  
e Charged-off account. (Ex. 
3, 4, 5) Account opened 
February 2001.  
$1,102 Unpaid. In his PSI, he stated he would 
pay this debt in early 2013. (Ex. 2) 
f Charged-off credit card 
account. Account closed 
by credit grantor. Account 
transferred or sold. (Ex. 
3, 4, 5)  
 
 
$500 Applicant asserts he was never late on 
this account, which he closed in 2007. 
As of December 2012, he did not know 
why it was reported as charged off. In 
December 2012, he stated he planned 
to pay this debt in early 2013. (Ex. 2) At 
the hearing, he stated he did not 
remember anything about this account. 
(Tr. 47)  
g Charged-off bank 
account. Account closed 
by credit grantor. Account 
transferred or sold. (Ex. 
3, 5)  
$5,766 Unpaid. In his PSI, he stated he would 
pay this debt in early 2013. (Ex. 2) At 
the hearing, he stated he would have to 
research this debt further. (Tr. 47) 
h Vehicle repossession.  
Vehicle purchased in 
February 2006 for 
$23,000 with $574 
monthly payments. (Ex. 
3, 4) It was repossessed 
in early 2008. (Ex. 2)  
$9,068 Unpaid. Applicant stated he owed 
$10,000 on the vehicle at the time of 
repossession. (Ex. 2) December 2012 
CR (Ex. 5) lists a $9,068 balance. 
 
 
i Home foreclosure. (Ex. 3, 
4, 5)  
$139,000 Unpaid. Home purchased in February 
2006 for $139,000.  
j Collection account for a 
wireless company.  
$121 Unpaid. This debt may have been a 
balance due when he moved overseas. 
This may have been for internet service. 
(Tr. 48) In December 2012, he stated he 
would pay this in full by January 2013. 
(Ex. 2)  
 
 
 
 
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 Creditor Amount  Current Status 
k Collection account for an 
account listed as NAS. 
$3,185 Unpaid. He closed his credit union 
account at this installation in 1996. (Tr. 
50) 
 Total debt listed in SOR $169,172 $30,172 excluding any deficiency 
following the foreclosure of his home. 
 
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines. In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which must be considered in 
evaluating an applicant’s eligibility for access to classified information. 
 
These guidelines are not inflexible rules of law. Instead, recognizing the 
complexities of human behavior, these guidelines are applied in conjunction with the 
factors listed in the adjudicative process. The administrative judge’s overarching 
adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 
2(c), the entire process is a conscientious scrutiny of a number of variables known as 
the “whole-person concept.” The administrative judge must consider all available, 
reliable information about the person, past and present, favorable and unfavorable, in 
making a decision. 
 
The protection of the interests of security is the paramount consideration. AG ¶ 
2(b) requires that “[a]ny doubt concerning personnel being considered for access to 
classified information will be resolved in favor of national security.” In reaching this 
decision, I have drawn only those conclusions that are reasonable, logical, and based 
on the evidence contained in the record.  
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is 
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The 
applicant has the ultimate burden of persuasion to obtain a favorable security decision.  
 
A person who seeks access to classified information enters into a fiduciary 
relationship with the Government predicated upon trust and confidence. This 
relationship transcends normal duty hours and endures throughout off-duty hours. The 
Government reposes a high degree of trust and confidence in individuals to whom it 
grants access to classified information. Decisions include, by necessity, consideration of 
the possible risk the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation of potential, rather than actual, risk of compromise of classified 
information. 
  
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Section 7 of Executive Order (EO) 10865 provides that decisions shall be “in 
terms of the national interest and shall in no sense be a determination as to the loyalty 
of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple 
prerequisites for access to classified or sensitive information).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
 Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to 
financial problems: 
 
Failure or inability to live within one's means, satisfy debts, and meet 
financial obligations may indicate poor self-control, lack of judgment, or 
unwillingness to abide by rules and regulations, all of which can raise 
questions about an individual’s reliability, trustworthiness and ability to 
protect classified information. An individual who is financially 
overextended is at risk of having to engage in illegal acts to generate 
funds. 
 
Additionally, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, negligent, or careless in properly handling and 
safeguarding classified information. Behaving responsibly or irresponsibly in one aspect 
of life provides an indication of how a person may behave in other aspects of life.  
 
A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts as agreed. Absent 
substantial evidence of extenuating or mitigating circumstances, an applicant with a 
history of serious or recurring financial difficulties is in a position of risk that is 
inconsistent with holding a security clearance. An applicant is not required to be debt 
free, but is required to manage his finances to meet his financial obligations. 
 
 Applicant has a history of financial problems. Applicant owed approximately 
$30,000 on ten past-due obligations plus his home went to foreclosure. Four of 
Applicant’s debts were under $600 each. Disqualifying Conditions AG ¶ 19(a), “inability 
or unwillingness to satisfy debts” and AG ¶ 19(c), “a history of not meeting financial 
obligations,” apply.  
 
 Five Financial Considerations Mitigating Conditions under AG ¶ 20 are potentially 
applicable: 
 
(a) the behavior happened so long ago, was so infrequent, or occurred 
under such circumstances that it is unlikely to recur and does not cast 
doubt on the individual's current reliability, trustworthiness, or good 
judgment; 
 
(b) the conditions that resulted in the financial problem were largely 
beyond the person's control (e.g., loss of employment, a business 
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downturn, unexpected medical emergency, or a death, divorce or 
separation), and the individual acted responsibly under the circumstances; 
 
(c) the person has received or is receiving counseling for the problem 
and/or there are clear indications that the problem is being resolved or is 
under control; 
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts; and 
 
(e) the individual has a reasonable basis to dispute the legitimacy of the 
past-due debt which is the cause of the problem and provides 
documented proof to substantiate the basis of the dispute or provides 
evidence of actions to resolve the issue. 
 
 For the past five years, Applicant has been gainfully employed. His current 
annual salary is $180,000 a year and the first three years of his employment with his 
current employer it was $140,000. Currently he has a $3,000 to $4,000 net remainder 
each month. Yet even his small delinquent accounts remain unpaid. In December 2012, 
when asked about his debts, he stated he would pay some of them in early 2013. A 
year later, none of the debts have been paid.  
 
When an individual has had their vehicle repossessed or had their home 
foreclosed upon they should be especially careful concerning their personal finances to 
insure problems do not continue or recur. Following a foreclosure or repossession, a 
person should be more aware, concerned, and careful about their finances than 
someone who has not experienced such severe financial problems. Following the 
foreclosure and repossession in 2007, Applicant’s financial problems continued. 
 
None of the mitigating factors for financial considerations apply sufficiently to 
mitigate the financial considerations security concerns. His financial difficulties are both 
recent and multiple. He produced no evidence of circumstances beyond his control, and 
he has not acted responsibly in addressing his debts. He has received no credit or 
financial counseling, nor has he demonstrated that his financial problems are under 
control. He has no plan to bring them under control. He has not made a good-faith effort 
to satisfy his debts.  
 
Because Applicant has multiple delinquent debts and his financial problems are 
continuing in nature, he receives minimal application of the mitigating condition listed in 
AG ¶ 20(a). Applicant’s handling of his finances, under the circumstances, casts doubt 
on his current reliability, trustworthiness, or good judgment. 
 
 Applicant receives partial application of the mitigating condition listed in AG ¶ 
20(b). Before February 2007, Applicant paid his son’s medical expenses. However, the 
mitigating condition that the financial problem was largely beyond Applicant’s control is 
offset by the fact that the delinquent obligations, resulting when he had to pay his son’s 
medical expenses, were incurred more than six years ago. Additionally, his annual 
salary for the past five years ranged between $140,000 and $180,000. He has had 
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sufficient time and income to address his financial delinquencies. Applicant has failed to 
act timely or responsibly under the circumstances. He failed to resolve his debts and 
failed to reduce his delinquencies.  
 
The mitigating condition listed in AG ¶ 20(d) does not apply because, to date, 
Applicant’s efforts to address his delinquent accounts have been minimal. There is no 
documentary evidence that he contacted any of his creditors and tried to arrange 
repayment plans. Applicant has failed to act aggressively, timely, or responsibly to 
resolve his delinquent debts.  
 
The mitigating condition listed in AG ¶ 20(e) does not apply because Applicant 
has not provided documented proof to substantiate the basis of any disputed account.  
 
Whole-Person Concept 
 
Under the whole-person concept, the administrative judge must evaluate an 
applicant’s eligibility for a security clearance by considering the totality of the applicant’s 
conduct and all relevant circumstances. The administrative judge should consider the 
nine adjudicative process factors listed at AG ¶ 2(a):  
 
(1) the nature, extent, and seriousness of the conduct; (2) the 
circumstances surrounding the conduct, to include knowledgeable 
participation; (3) the frequency and recency of the conduct; (4) the 
individual’s age and maturity at the time of the conduct; (5) the extent to 
which participation is voluntary; (6) the presence or absence of 
rehabilitation and other permanent behavioral changes; (7) the motivation 
for the conduct; (8) the potential for pressure, coercion, exploitation, or 
duress; and (9) the likelihood of continuation or recurrence. 
 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a 
security clearance must be an overall commonsense judgment based upon careful 
consideration of the guidelines and the whole-person concept.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. There is some evidence in favor of 
mitigating Applicant’s financial situation. He currently does not have a credit card. He 
made a $30,000 down payment on a home in 2013 and is current on this mortgage and 
utility payments. He is paying his alimony requirements. He is providing financial 
assistance to his son, daughter, sister, and niece. 
 
The disqualifying evidence under the whole-person concept is more substantial. 
He has been employed since January 2008. Some of the delinquent accounts were 
incurred before he obtained his current job. Even with more than five years of steady 
employment, he has yet to even pay the smaller delinquent debts listed in the SOR. In 
December 2012, he stated he would pay some of the debts in early 2013. He has paid 
none of his delinquent accounts. His long-standing failure to repay his creditors, at least 
in reasonable amounts, or to arrange payment plans, reflects traits which raise 
concerns about his fitness to hold a security clearance. 
9 
 
 
 
 
The concept of “meaningful track record” includes evidence of actual debt 
reduction through payment of debts. However, an applicant is not required to establish 
that he has paid off each and every debt listed in the SOR. All that is required is for him 
to demonstrate he has established a plan to resolve his delinquent debt and has taken 
significant action to implement that plan. Applicant has yet to establish a repayment 
agreement or pay his delinquent obligations. 
 
The issue is not simply whether all of Applicant’s debts have been paid – they 
have not – it is whether his financial circumstances raise concerns about his fitness to 
hold a security clearance. (See AG & 2(a)(1).) Overall, the record evidence leaves me 
with questions and doubts about Applicant’s eligibility and suitability for a security 
clearance. Any doubt must be resolved in favor of national security. For all these 
reasons, I conclude Applicant has not mitigated the security concerns arising from his 
financial considerations.  
 
Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, 
as required by Section E3.1.25 of Enclosure 3 of the Directive, are: 
 
 Paragraph 1, Financial Considerations:  AGAINST APPLICANT 
 
  Subparagraphs 1.a - 1.k:   Against Applicant 
   
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant Applicant a security clearance. 
Eligibility for access to classified information is denied.  
 
 
_______________________ 
CLAUDE R. HEINY II 
Administrative Judge